Indian rupee slips on-week, traders reckon 'line in sand' near 96/USD will hold

Business Recorder reported that the Indian rupee closed lower on the week on Friday, ending at 95.8750 per dollar after a modest gain on the day. The currency fell 0.3 per cent over the week, pressured by expectations of higher global interest rates. Traders said central bank intervention was expected to limit losses near the 96 level per dollar.

The US Federal Reserve and the Bank of Japan both raised rates this week, adding to a wave of tightening by other central banks as the Iran war raises inflation risks. Higher borrowing costs weigh on emerging market currencies and equities, according to the report. Oil prices, which neared four-month highs earlier in the week, eased after reports that Saudi Arabia aimed to restore roughly half of its East-West pipeline capacity within days.

DBS said it expects India and the Philippines to raise rates next quarter, with higher odds for Malaysia. Traders noted that the Reserve Bank of India has defended the 96 level firmly in recent sessions, while foreign portfolio inflows, including strong demand for the National Stock Exchange of India's $2.3 billion IPO, supported the currency.